Kim Reigns

Piplack v. In-N-Out Burgers, No. G061098 (D4d3 Mar. 7, 2023)

Galarsa v. Dolgen California, LLC, No. F082404A (D5 Feb. 24, 2023)

So, like I was saying in my post on Viking River, in nuking the Iskanian rule that an individual PAGA claim can’t be sent to arbitration, the U.S. Supreme Court kind of assumed that the remaining representative claims would get dismissed for a lack of standing. But California doesn’t have Article III-type standing, and the idea that the plaintiff would lose statutory standing when her claim was hived off was essentially foreclosed by the California Supreme Court’s decision in Kim v. Reins Int’l California, Inc., 9 Cal. 5th 73, 84 (2020).

The standing issue is pending before the California Supreme Court in Adolph v. Uber Technologies, Inc., which hasn’t been argued yet. But in the last couple of weeks, both the 4/3 and the 5 have come to the same conclusion I did—the big Supremes got California law wrong in Viking River because they misread Kim. And since the California Supreme Court is the ultimate arbiter of California law, Kim reigns.

Update (3/27): The Second District just reached the same conclusion. 

(4/7) And again, this time the 4/1. 

Ex-Member Lacks Standing to Sue for LLC

Sirott v. Superior Court, No. A164037 (D1d1 May 5, 2020)

Under Corporations Code § 800, to have standing to bring a derivative claim, the plaintiff needs to hold an interest in a corporation throughout the litigation. Here, the Court holds that same rule applies to a member of an LLC bringing a case decoratively under Corporations Code § 17709.02.

Writ granted.

Whiskey is for Drinking . . .

Dow v. Lassen Irrigation Co., No. C091965 (D3 Feb. 23, 2022)

This is a water dispute over an 80-year old consent decree. Under the decree, an organization called the Watermaster is vested, as an agent of the court, with some degree of discretion in administering the decree by doling out the water in the Susan River. Plaintiff in the case asked the Watermaster to allot some water in certain ways, which the Watermaster denied. A series of administrative appeals ensued and ultimately Plaintiff sued the Watermaster and some other party allotted water rights under the decree in superior court. The superior court ruled for Plaintiff. The Watermaster appealed.

The issue here is that only a “party aggrieved” can appeal. See Code Civ. Proc. § 902. The Watermaster is not such a party. It doesn’t get any more or less water because of the superior court’s order. It is more along the lines of a discovery master whose ruling got overturned. The Watermaster tries to argue that it is aggrieved because the court’s ruling will make the decree more difficult to administer. But the Watermaster is compensated for administrative expenses, which are passed on to the owners of the water rights.

Of course, water in California being a finite thing, the other party whose water rights will be affected by the court’s order is “aggrieved.” But the Court of Appeal will handle that separately.

Appeal dismissed.

Not that Special

Moreci v. Scaffold Solutions, Inc., No. A161193 (D1d2 Oct. 18, 2021)

A Plumber was injured when he fell from a construction scaffold. He sued ScaffCo. They settled. Under the terms of the settlement Plumber agreed to assume ScaffCo's defenses for any claims arising from the accident. Plumber’s employer Workers’ Comp Carrier—which had paid Plumber about $240k in benefits—intervened and crossclaimed against ScaffCo and one of the other contractors on the job site. The underlying case between Plumber and ScaffCo was dismissed. Subsequently, Plumber’s Lawyers associate in to defend ScaffCo in its litigation against WCC. 

WCC moves to disqualify Plumber’s Lawyers from repping ScaffCo. It argues that Plumber’s Lawyers can’t be allowed to switch sides like that. Substantively, that might be correct. But the problem with the argument is that to have standing to DQ a lawyer, you generally need to be a current or former client of that lawyer. Which WCC was not. So the trial court denied the motion. WCC appealed.

The Court of Appeal notes a split of authority regarding standing to bring a DQ. Under the so-called “majority rule,” only a client has standing. But under a “minority rule”—which appears to have developed largely in cases with very messy fact patterns—a non-client can have standing, but only if the attorney owed the non-client some kind of duty of confidentiality.

WCC tried to glom onto some of the language in a federal minority rule case that suggested that having a “personal stake” in a conflicted representation is enough to afford standing. According to WCC, it had such a stake because Plumber’s Lawyers have an advantage given all they know from representing Plumber. But the language from that case was discussing Article III notions. And it ultimately held that the movant lacked standing because the lawyer it sought to DQ didn’t owe the movant any duties and that neither a “broad interest in the administration of justice” nor a “tactical interest” that a failure to DQ will “increase [the opposing party’s] chances of losing this lawsuit” were adequate to convey standing. 

WCC also tried to argue that its relationship as Plumber’s Employer’s Workers Comp Insurer created some kind of special relationship that would give rise to standing. The discussion involves a bunch of substantive issues regarding workers’ comp law that are way out of my lane as a civ pro blogger. But at the end of the day, the Court of Appeal finds that the substantive law does not so closely align the interests of employer, employee, and insurer to create some kind of special or privy relationship that would permit them to raise each others’ rights. 

Affirmed.

From the Dudes Who Brought You San Diegans for Open Goverment...

Spotlight on Coastal Corruption v. Kinsey, No. D074673 (D4d1 Nov. 24, 2020)

This is a private action seeking civil penalties for violations of statutes requiring members of the Coastal Commission to disclose any ex parte communications they might have that bear on matters before them for decision. Plaintiffs are an entirely lawyer-driven outfit that has no actual business before the CCC—they just want a scalp and attorneys’ fees. Ultimately, that’s what they got. Although the trial court found that the Plaintiffs only proved a tiny fraction of the alleged violations, it fined the five Commissioners between $2,600 and $30,300 each and awarded Plaintiffs about $1 million in attorneys’ fees.

There’s an issue, however, with standing. Two of the three counts of the complaint sought direct enforcement of the statutes containing ex parte prohibitions. These statutes, however, do not include any private rights of action. 

Plaintiffs claim “public interest” standing. I.e., that they can sue to enforce statutes that do not contain a private right of action. There is a public interest standing doctrine that applies to claims for a writ of mandate. But notwithstanding some labeling in Plaintiffs’ complaint and prayer, they are not actually seeking a writ. They are not trying to compel the CCC or its commissioners to abide by some non-discretionary duty. They are, instead, trying to get fines assessed for past conduct. That is not the province of mandate. 

Beyond that, even under the relatively broad standing rules that apply in state court, there’s no generalized free-floating grant of standing for anyone who claims to be acting the public interest. Plaintiffs try to warp a rule that says trial courts have discretion to deny public interest standing (in mandamus cases) to suggest they they have the discretion to permit public interest standing in any kind of case. But that’s not what the law says.

There is statutory standing, however, for private citizens to pursue claims for certain civil penalties under the Coastal Act. (An enforcement fund keeps the fines, but Plaintiffs can get attorneys’ fees.) Plaintiffs’ third claim alleges just such claims. As the Court of Appeal sees it, however, the problem is that the provisions for which standing is conveyed are addressed to development violations. They don’t actually provide penalties against the commissioners for violating the ex parte prohibitions. Those violations are addressed by a separate statute, which apparently lacks a private right of action. So this claim gets reversed too.

Reversed.

Let's Talk Standing

People for the Ethical Operation of Prosecutors and Law Enforcement v. Spitzer, No. G057546 (D4d3 Aug. 12, 2020)

Plaintiffs here bring a taxpayer action under Code of Civil Procedure § 526a and a writ of mandate, challenging the legality of a confidential informant program the OC Sheriff is alleged running in the county jails. 

The trial court dismissed for lack of standing. But that’s wrong. 

Section 525a conveys broad standing in taxpayers to sue to enjoin unlawful government activity. And although § 3369 prohibits injunctions to “enforce a penal law,” against criminal conduct, it doesn’t apply here, even though some of the allegations implicate the OC DA and Sheriff in violating the provisions of the Penal Code that codify the Brady doctrine. As the Court explains § 3369’s reference to penal law is to criminal conduct, not criminal procedure. 

There’s also standing for the writ claim. Mandamus standing generally requires the plaintiff to be beneficially interested. But there’s an exception for public interest claims. The exception is subject to some prudential limitations. For instance, it can’t be used to collaterally attack other proceedings. But none of them apply here.

Reversed.

Settling Personal Claims Kills PAGA Standing

Kim v. Reins Int’l. Cal., Inc., No. B278642 (D2d4 Dec. 29, 2017)

Plaintiff here brought some PAGA claims along with some regular wage and hour stuff. The wage and hour claims got sent to arbitration, and the PAGA claims—which can never be sent to arbitration—were put on ice while that was happening. The parties settled the stuff in arbitration, and as part of that, Plaintiff dismissed those claims with prejudice.

Stare Decisis Carries the Day

Hernandez v. Restoration Hardware, No. S233983 (Cal. Jan. 29, 2018)

I wrote about this case when it was decided by the Court of Appeal in early 2016. Basically, the court held that because Code of Civil Procedure § 902 permits only a “party aggrieved” to appeal, a member of a certified class who objects to a settlement cannot appeal the overruling of her objection unless she formally intervenes and becomes a party. The court realized that result was inconsistent with a number of prior Court of Appeal decisions as well as federal class action practice. See Devlin v. Scardelletti, 536 U.S. 1, 14 (2002). But it felt bound by Eggert v. Pac. States S. & L. Co., 20 Cal. 2d 199 (1942), in which the California Supreme Court held, before the advent of modern class actions, that to have standing to appeal, a settlement objector needs to either formally intervene or file a motion to vacate the judgment under § 663. 

As I noted, the split was the kind of thing the Supreme Court needed to step in to sort out. And it did. And—somewhat surprisingly to me, at least—the Court affirms in an essentially unanimous opinion by Justice Chin. Basically, the general annoyingness of needing to move to intervene or vacate isn’t enough to overcome the stare decisis effect of Eggert, which rested on a reasonable interpretation of § 902. While federal courts and courts of other states might disagree, they don’t have § 902 to contend with. 

Justice Liu concurs to note that Eggert is out of wack with current class action practice federally and in other jurisdictions, and to explain that the policy rationale for it doesn’t make a lot of sense. But since it’s based on the interpretation of a statute that the Legislature could fix were it so inclined, Justice Liu agrees that stare decisis carries the day.

Affirmed.

Pleas in Abatement Are This Disfavored

The Rossdale Grp. v. Walton, No. H043476 (D6 Apr. 15, 2017)

This is a weird and kind of narrow opinion about standing that is mostly shaped by how the issue was raised the superior court. The case is a malicious prosecution action against a Lawyer who was (allegedly) in the business of extorting settlements from meritless claims. 

No Property Tax Required for Taxpayer Standing; Else Unresolved

Weatherford v. City of San Rafael, No. S219567 (Cal. Jun. 6, 2017)

Code of Civil Procedure § 526a gives taxpayers standing to bring claims to enjoin wasteful or unlawful expenditures by government entities. The question presented to the Supreme Court here is: What kind of taxes need to be paid to have taxpayer standing? 

Risky Move Does Not Pay Off

City of San Diego v. San Diegans for Open Gov’t, No. D068939 (on rehearing, Oct. 17, 2016)

San Diegans for Open Government—somewhat of a gadfly litigant in local matters down there—won an attorney fee award against the city in a validation action brought under Code of Civil Procedure § 861.1.

And Now for Some Qui Tam . . .

People ex rel Allstate Ins. Co. v. Dahan, No. B259799 (D2d3 Sept. 15, 2016)

This is kind of interesting. A relator wins a false claims act case in which the government declined to intervene. The losing defendant tries to argue that its liability on the judgment is improperly allocated between the relator and the government. But, as the court holds here, the defendant/debtor doesn’t have standing to complain about that. Regardless of who it owes to, its still owes. So it isn’t aggrieved by the allocation.

Appeal dismissed.

Class Action Objectors Get No Ticket to the Appellate Party

Hernandez v. Restoration Hardware, No. D067091 (D4d1 Mar. 14, 2016)

Plaintiff won a $36.4 million bench verdict in a rare class action that actually went to trial. The court awarded 25 percent of the judgment as a fee award to the plaintiffs’ attorneys. Subject to the parties post-trial “clear sailing” agreement, the Defendant didn’t contest the award. But a class member objected, both on the basis that the court didn’t give the class notice of the fee hearing, and on the merits of the award itself. The trial court rejected the objection and entered a judgment including the 25 percent award. The objector appealed.

37.5 Percent for Ten Years

Roos v. Honeywell Intl., No. A142156 (D1d1 Nov. 10, 2015)

Some class members object to an $8.15 million class action settlement in an antitrust case. They say the plaintiffs’ lawyers are getting too much of the pie and that the cy pres is improper. The trial court found that one of the objectors was too late to complain and that the others lacked standing. But in any event, the objections failed on the merits too. The court of appeal affirms on all of the rulings except standing.

Conflicts and the Dissolving Partnership

Coldren v. Hart, King & Coldren, Inc., No. G050202 (D4d3 Aug. 5, 2015)

Departing Partner in a 50/50 two-partner law firm sued his Firm and his Remaining Partner over the terms of his retirement. Firm and Remaining Partner sued back. Remaining Partner and Firm were represented in the litigation by the same Attorney, who had never previously represented Firm or Departing Attorney. Departing Partner brought a DQ motion, claiming that Attorney couldn’t represent both Remaining Partner and the Firm—in which Departing Partner continued to claim his 50 percent stake. After waffling on the tentative, the trial court granted the motion. 

But the court of appeal reverses. The decision rests on two grounds.

Right to Jury Trial Applies to Dispute over Standing to Bring Construction Defect Claim

Stoffer v. Shappel Indus., Inc., No. A139385 (D1d5 Jan. 15, 2015)

Construction defect law has this rule that practitioners in the field sometimes call “standing,” but which is really more of a claim accrual issue. Whoever owns a property when an injury due to a latent defect becomes manifest owns the claim. Later owners take the property subject to the defect and have no claim, unless there’s an assignment. 

Here, the facts about when the defect became known were disputed. The court resolved the dispute, in defendant’s favor, at a bench trial. But that was error. Although the ultimate determination of accrual might be a legal call for the judge to make, when disputed, the underlying fact issues are subject to the right to jury trial. 

Reversed.

Standing up for State Standing

Hector F. v. El Centro Elementary School Dist., No. D064035 (June 24, 2014)

A student who brought a writ of mandate against his school graduated while the litigation was pending. The trial court granted the school’s motion to dismiss for mootness and lack of standing. But state standing isn’t like federal Article III standing. In the mandamus context, longstanding California precedent recognizes the standing of citizens to litigate public rights in the public interest, so long it does not short-circuit important processes of governing meant to occur outside of litigation. Furthermore, Code of Civil Procedure § 526a gives taxpayers standing to sue to enjoin unlawful expenditures of public funds. That right has been construed broadly to include unlawful governmental actions with only incidental costs.

Reversed.

Standing Up for Associational Taxpayer Standing

Gilbane Building Company v. Superior Court, No. D063685 (D4d1 Jan. 23, 2014)

A community group brought a taxpayer suit against a contractor that had done business with a school district, alleging various causes of action to the effect that the contractor had made improper gifts to district officials in order to win the contracts. The contractor demurred, challenging the community group’s standing to sue on the grounds that it was not itself a district taxpayer, that its lawsuit was usurping the district’s discretionary functions and that it had not made a demand that the district sue on its own behalf. The trial court denied the demurrer and the contractor sought writ review.

Although it takes up the writ, the court of appeal denies relief. Citing to a recent case from the same division, Taxpayers for Accountable Sch. Bond Spending v. San Diego Unified Sch. Dist., 215 Cal. App. 4th 1013, 1031–1033 (2013), the court of appeal holds that an association has standing to bring a taxpayer action under Code of Civil Procedure § 526a, provided some of its members have standing to sue on their own behalf, even if the association itself does not pay taxes. And the rule prohibiting taxpayers from usurping a public agency’s discretion through taxpayer suits is inapplicable. Assuming that the complaint’s allegations that the district had expended funds illegally are true—as required on a demurrer—the contracts are void, not merely voidable. Under those circumstances, action by the district is mandatory; its governmental discretion is not implicated. Finally, requiring a demand would be futile, as district officials were alleged to be participants in the wrongdoing. It is doubtful that they would initiate a lawsuit to correct their own malfeasance. And even if a demand were required, the community group’s notification to the district that it intended to bring suit was sufficient to put the district on notice and to permit the district an opportunity to commence an action on behalf of its constituents.  If actual refusal of a demand were a requirement, a public agency could simply forestall taxpayer litigation by refusing to respond to a demand.

Writ denied.

Non-Taxpayer Can't Get Taxpayer Standing

Reynolds v. City of Calistoga, No. A136502 (D1d5 Feb. 3, 2014)

By statute, California conveys upon taxpayers general standing to sue government entities for injunctive relief resulting from illegal expenditures, injuries to public property, or waste. See Cal. Code Civ. Proc. § 526a. But the plaintiff still needs to have paid some taxes to the defendant government in order to invoke the rule. Plaintiff here paid no taxes to the defendant. And the court declines his invitation to extend taxpayer standing even to non-taxpayers. Nor is he entitled to the sort of public interest standing that applies in some kind of mandamus proceedings; mandamus was not at issue in this case. Nor is he entitled to standing on a public trust grounds because he did not assert that the government action about which he was complaining resulted in harm to any resources held in trust for the public. So his complaint was properly dismissed for lack of standing.

Affirmed.

Represent!

Market Lofts Community Association v. 9th Street Market Lofts, LLC, No. B245558 (D2d2 Jan. 7, 2013)

In a dispute between a developer and a homeowners’ association over parking spaces at some lofts across the street from Staples Center, the court of appeal reverses an order sustaining the developer’s demurrer for lack of standing. Because the HOA was a party to the parking contract with the developer, and an actual dispute about the HOA’s rights had arisen, it had standing to sue on its own behalf for declaratory relief. As to the HOA’s other claims—for breach of a contract between the developer and the homeowners, breach of fiduciary duty, fraud, rescission, and violations of the Unfair Competition Law—the court held that the HOA had representative standing to bring claims on behalf of its members under Code of Civil Procedure § 382. Although most people think of § 382 as the statute that authorizes class actions (albeit kind of vaguely), it also covers representative actions of other sorts. While “[i]t may also be true that while all class suits are representative in nature, all representative suits are not necessarily class actions.” (quoting Raven’s Cove Townhomes, Inc. v. Knuppe Dev. Co., 114 Cal. App. 3d 783, 794 (1981)). Standing to bring a representative action is appropriate when there is “an ascertainable class and a well-defined community of interest in the questions of law and fact involved affecting the parties to be represented.” Here, the issues raised by the HOA’s complaint were common amongst its members, who would all be affected in the same manner by the their resolution, and in the absence of standing for the HOA, the homeowners would need to litigate 267 separate claims. Under the circumstances it was appropriate to afford representative standing to the HOA under § 382. That the developer might have individualized defenses against the homeowners did not merit otherwise.

Reversed.